Ohio Auditor Dave Yost released his annual assessment of the financial health of Ohio's 88 counties and 247 cities on Thursday. The report evaluates the outlook for 17 economic indicators, grading them as positive, cautionary or critical.

Licking County government received a critical rating for its ratio of general revenues to net expenses, and for the ratio of debt service expenditures to total revenues. The county received cautionary or critical ratings in five categories, up from two such grades in 2016 and just one in 2015.

Licking County Commissioner Tim Bubb said the county spent more on capital projects in 2017, and its 2018 evaluation will probably be much better. He said the county has $14 million in its rainy day fund and received a AA rating in May from Standard and Poor's.

"I think we're in really good shape," Bubb said. "We're considered a very healthy county by Standard and Poor's.

"The years of 2016 and 2017 were unusual years for us. We were doing a lot of capital projects out of our general fund. County spending is less this year. We're getting back to more of a normal year."

The spending included one-time projects such as the restoration of the Licking County Courthouse, renovation of the East Main Street Annex, creation of the county's Records and Archives facility, and the final year of its five-year bridge replacement program.

Two of the cautionary outlooks for the county are in the areas of unrestricted net assets and unassigned fund balance of the general fund. The state cautions that declines in these areas show there is little or no room for unexpected expenses. The third cautionary indicator is a decline in general fund property tax revenue.

Bubb said the balance in the rainy day fund shows the county can deal with unexpected expenses, even another recession.

There were no counties with enough critical indicators, which is 12, to suggest they were facing fiscal stress. Hamilton County shows early signs of stress and Coshocton County is just one indicator away from showing signs of stress, according to the report.

How other Ohio cities fared

Ohio cities did not fare as well, with a 33 percent increase in the number facing fiscal stress or one indicator away.

In Newark, the financial picture has brightened, according to the report. Newark had seven indicators rated as either critical or cautionary in 2015. That number has declined to just two, both cautionary.

Mayor Jeff Hall said attributed the dramatic improvement to a few less leases, a slight increase in revenue, and teaching efficiencies.

"It certainly is good news," Hall said. "These are indicators showing a trend. I'm real happy to see the direction we're going in. We're doing a lot of financial education of our employees."

When a city department saves money, it's helpful to use that savings in the same department, Hall said.

"If it goes to another department, that's not very motivating," the mayor said.

The two cautionary grades for Newark were for the condition of its capital assets, and for its ratio of average daily expenses to expenditures.

In the latter category, the report estimates how many days the city could survive on its unrestricted net assets, unassigned fund balance, cash and investments. Newark improved from 14 days in 2016 to 18 days in 2017. If it reaches 30 days, the city would move into a positive outlook for the indicator.

The city of Heath received one critical and two cautionary scores. The critical outlook was for its ratio of general revenues to net expenses. The cautionary categories were the unassigned fund balance of the general fund, and a decline in general fund property tax revenue.

Pataskala received a critical rating for its debt service expenditures to total revenues, and a cautionary rating for its unassigned fund balance of the general fund.

kmallett@newarkadvocate.com

740-328-8545

Twitter: @kmallett1958

Financial health indicators

Following are the state auditor's results showing the 2017 financial health for local governments in 17 financial categories.